Dell's SecureWorks valued at $1.42 billion in year's first tech IPO
By Sruthi Shankar
(Reuters) - Dell Inc's [DI.Ul] cyber security unit, SecureWorks Corp, could be valued at up to $1.42 billion in its initial public offering, the first major U.S. listing of a technology company this year.
Atlanta, Georgia-based SecureWorks said on Monday its offering was expected to be priced at $15.50-$17.50 per Class A share, raising as much as $157.5 million.
The share issue market worldwide plunged to a seven-year low in the first quarter, more than halving from a year earlier to $106.6 billion, as worries over slowing economic growth kept investors wary, according to Thomson Reuters data.
"From such a low base, there's only one way to go and that's up," Jay Ritter, an IPO expert and a professor of finance at the University of Florida, told Reuters.
"I don't expect that there's going to be a flood of IPOs, but there will be an increasing number of companies in a variety of industries that will go public."
In the past few years, several cyber security firms such as FireEye Inc (FEYE.O: Quote), Rapid7 Inc RPD.O and Mimecast Ltd MIME.O have gone public to take advantage of growing investor interest in them after a spate of hacking attacks on companies including major banks and retailers.
However, shares of Rapid7 and FireEye, which popped 70-80 percent in their debut, are now trading way below their IPO prices. Mimecast, which jumped 20 percent on its listing day, has also slipped below its offering price.
Ritter warned against premium pricing for stocks of cyber security firms, saying that these companies were fighting for market share, which would keep their profit growth muted. Continued...